US Dollar Index (DX) Futures Technical Analysis – May 2, 2016 Forecast

The U.S. Dollar is trading lower against most major currencies today, leading to a weaker June U.S. Dollar Index futures contract.

The main trend is down according to the daily swing chart. On Friday, the selling was strong enough to take out the August 24, 2015 bottom at 93.50 for the June 2016 futures contract.

Earlier today, the selling pressure was strong enough to take out the nearby futures contract bottom on that date at 93.01. The September 2015 contract would have been the nearby contract.

Taking out 93.01 means the index has entered the “free fall” area since there is no identifiable support under this price until the major 50% level at 91.14. Don’t be surprised if we see an acceleration to the downside sometime this week.

Today is the sixth day down from the last main top which means on Tuesday, we will enter the window of time for a potential closing price reversal bottom. This chart pattern will not mean the trend is getting ready to turn up, but that conditions are ripe for profit-taking or aggressive counter-trend buying.

Now that we’ve taken out 93.01, the direction of the market the rest of the session is likely to be determined by trader reaction to this price. Watch the order flow and price action at 93.01 to determine whether sellers are still coming in to push the market lower, or if speculative buying is starting.